Did know your first house could pay for itself?
Here are 6 reasons to make your first home a multifamily property.
1. Collecting rent for the unit(s) you will not occupy can go a long way to subsidizing, if not sometimes even covering, your monthly loan payment.
2. The portion of the property that is rented can be depreciated. This lowers your tax liability on the rental income.
3. Expenses for maintenance and repairs can also be deducted for the rented portion of the property.
4. You may be able to purchase a more expensive property. Over time, this may provide a larger accumulation of equity than a lesser priced property.
5. New guidelines have made it easier to purchase an investment property as an owner-occupant than as an investor. Down payment requirements are as low as 5%. To expand credit availability and access to affordable rental housing, Fannie Mae has relaxed the down payment requirements for owner-occupants on purchase and basic refinance loans for multifamily homes.
Here's what you need to know:
- Past requirements of 15% and 25% are being changed, and you can now purchase a two-, three- or even four-family home as an owner-occupant with as little 5% down.
- This change takes effect for loans closing after November 18, 2023.
- Regular Conventional Loans
- HomeReady Loans for low-income buyers
- HomeStyle Renovation Loans that combines purchase and rehab costs
- Not available for high balance loans
6. If you later decide to purchase and move to a single-family home, you can own the property purely as an investment. This is one of the easiest ways to become a real estate investor.
Reach out when you're ready, and we'll help you discover the benefits of a multifamily purchase for your scenario!